NEWS | Wednesday, 23 April 2008

SmartCity owners vex the US government

David Darmanin

After US property developers Capital Partners sued Tecom investments for $1 billion over 38 acres of land at the Internet Smart City in Dubai, a document signed by the US Congress shows that free trade talks between the US and the UAE may be hindered.
A letter presented by the US House of the Representatives on 28 March advised the US Trade Representative (USTR) to resolve the matter with Tecom amicably, through its current negotiations on an eventual Free Trade Agreement (FTA).
Suggesting that negotiations may end up going belly up, the letter read: “The USTR should emphasise that a resolution of this case and any others like it is necessary for any further progress toward an FTA.”
Tecom, the technology investments company tied in an agreement with the Maltese government to build the $300 million project at the Ricasoli Industrial Estate, entered into a dispute with US company Capital Partners, who tried to buy off 38 acres of land at the Tecom-owned Dubai Internet City in July 2005.
After signing the purchase agreement, Capital Partners sued for $1 billion after claiming that ultimately the land does not belong to Tecom as initially thought, but to another Dubai government entity.
In August 2005, the US firm filed a lawsuit for $1 billion on grounds of breach and misinterpretation of contract. The case is being handled by the Dubai International Arbitration Centre.
Meanwhile, Capital Partners, Tecom, and US diplomats in the UAE declined to pass on any comments to the international media.
Asked how this dispute is expected to affect Malta’s interests with Tecom, a spokesperson for the Ministry for Communications, Investments and National Projects commented: “The matter reported appears to refer to concerns raised by the legislative branch of the US Government with the executive branch on how the US should make progress on an agreement it is currently negotiating with the United Arab Emirates. The Government of Malta is not in any way referred to in the concerns raised and in any case is not party to the dispute with Tecom Investments that seem to be the cause of the concern range. As such we see no connection with Malta in the matter you referred to us.”